The pet economy is heating up again, with the annual sales of the best-selling single category reaching 50 million sets

In recent years, pet owners have shown a strong enthusiasm for consumption, which has driven the pet economy to grow. However, the trend of younger consumer groups, accelerated product updates, and quality and cost-effectiveness have put forward higher requirements for pet products, and the market competition is fierce.

However, there are still many outstanding domestic cross-border sellers, such as Tianyuan Pet, Zhongheng Pet, etc. Tianyuan Pet recently released its 2021 performance, and its business data shows that the pet market has huge room for growth.

Five major categories of products support sales of over 1.8 billion

According to the 2021 performance released by Hangzhou Tianyuan Pet Products Co., Ltd. (hereinafter referred to as Tianyuan Pet), its growth momentum in 2021 is encouraging. The total sales of five major categories of products, including pet bed mats, cat climbing frames, pet toys, pet food and other products, exceeded 1.8 billion yuan.

Tianyuan Pet is a company mainly engaged in the design, development, production and sales of pet products. Its products include pet beds, cat climbing frames, pet toys, pet clothing, electronic smart pet products, pet food and other multi-series and full-category pet products.

Currently, Tianyuan Pet has entered international pet markets such as the United States, the European Union, and Japan. Its downstream customers include Amazon, Walmart, and some vertical pet e-commerce companies such as Chewy.

Data shows that in 2021, Tianyuan Pet's main business income was 1.827 billion yuan, a year-on-year increase of 27% . After deducting non-recurring gains and losses, the net profit attributable to the parent company's shareholders was 96.2866 million yuan, a slight decrease from the previous year, but not significant. It is worth mentioning that Tianyuan Pet's five major product categories made significant contributions to sales revenue in 2021.

Among them, pet toys and cat climbing frames had impressive sales data in 2021, accounting for 20.19% and 22.01% respectively, with sales revenues of 369 million yuan and 402 million yuan respectively. Pet toys have become the darlings of consumers, and Tianyuan Pet sold 50 million sets in 2021.

Another product, the cat climbing frame, has become Tianyuan Pet's main product for entering the North American market. It has a high market unit price, and the number and amount of orders with a single amount of US$50 to US$200 account for a high proportion. The sales share of other products is increasing year by year.

In the market environment where the online pet economy is heating up, Tianyuan Pet has actively expanded its online business since 2019, and has carried out domestic and overseas online sales layout on multiple third-party platforms such as Amazon and JD.com. The self-operated stores opened on Amazon have further promoted significant growth in related sales revenue.

Judging from the data, its sales performance on Amazon in 2021 was significantly higher than that on other platforms. Its self-operated store revenue on the Amazon platform exceeded 14.28 million yuan, accounting for 25.06% of its self-operated online revenue.

From the perspective of market segmentation, Tianyuan Pet's export revenue from the North American market in 2021 was 496 million yuan. The export revenue of Europe, another major market, was slightly lower than that of the North American market, at 364 million yuan. It is understood that Tianyuan Pet's customers in North America are mainly supermarkets and e-commerce companies, with the US market being the main one, accounting for more than 85% of its North American export revenue, and the proportion of other markets is also increasing year by year.

Although the financial report data is relatively encouraging, in order to have higher market competitiveness, product innovation and strengthening of own brands have become top priorities, and Tianyuan Pet is also aware of this.

The proportion of revenue from own brands increased, and Tianyuan Pet focused on innovation

According to current reports, the proportion of private label products in Tianyuan Pet is still relatively high, but with increased investment in private brands, the proportion of Tianyuan Pet's private brands in the company's revenue has also been increasing in recent years.

Tianyuan Pets mainly exports products, and the overseas pet market is relatively mature and the local brands are well-known. It was difficult for domestic sellers to gain market share in the early days, which is why many big sellers started with OEM. As the business scale expanded and the product became more well-known, Tianyuan Pets also began to develop its own brand.

At present, "CATCRAFT" under the overseas subsidiary Osai and "Made4Pets" used in overseas warehouse business are the main self-owned brands of Tianyuan Pet, and the others are mainly OEM production. In addition to purchased products such as pet food, the main domestic products are "Yili" and "Xiaoshouxing" self-owned brands.

From 2019 to 2021, with the development of overseas subsidiaries and overseas warehouse business, although it is still not very high, the proportion of Tianyuan Pet's own brand is increasing year by year.

In order to meet the ever-increasing demands of consumers and enhance its competitiveness in the market, Tianyuan Pet focuses on "new creativity" in product functions, product themes, etc.

In terms of product functions, Tianyuan Pet has developed remotely controlled automatic feeders, simulated electric toys that can be controlled via Bluetooth, and pet luminous tags with anti-lost functions. In terms of themes, we combine various elements based on the characteristics of pets to design different theme sets, such as various holiday sets, outdoor sets, etc. We also creatively develop products such as pet cabinets and pet shoe stools to meet the needs of both pets and owners.

Based on the current development momentum, the development of Tianyuan Pet's own brand will surely have a higher proportion. However, its development path is inseparable from Tianyuan Pet's own efforts and the overall industry background.

A record high, U.S. pet industry sales exceeded $123 billion in 2021

Recently, the American Pet Products Association ( APPA) announced the industry's sales figures for 2021. The data showed that the pet industry's annual sales hit an all-time high of US$123.6 billion, marking the second record-breaking year in 2020 when sales exceeded US$100 billion for the first time. This growth is expected to continue in 2022.

Overall, spending in all categories has increased. About $50 billion was spent on pet food and snacks, the highest spending category, which grew 13.6% year-on-year; care ranked second with $34.3 billion; pet supplies and over-the-counter drugs had the largest sales growth, up 17.8% year-on-year to $29.8 billion; other service categories including grooming and dog walking also grew 17.3%, with sales reaching $9.5 billion.

Among these expenditures, young people of the millennial and Generation Z are the main force of online purchases. They are willing to spend more on pets and are more experimental in purchasing types, including food, snacks, toys, care and other types of products.

Despite the unstable factors such as inflation, supply chain issues and global relations in 2022, APPA said that the U.S. pet industry will still maintain a moderate growth rate.

The pet industry in Europe and the United States is relatively mature, and the popularity of pet e-commerce has increased during the epidemic. Domestic sellers such as Tianyuan Pet and Zhongheng Pet have seen an increase in sales. Under the market dividend, a wave of small and medium-sized sellers have joined this field.

However, with the development of the market and the continuous increase in consumer demand, pet products are also moving towards a more intelligent and professional direction. When sellers enter the market, they must also take into account the market saturation and changes in consumer demand and work harder on product innovation.

Tianyuan Pets

50 million sets

1.8 billion